How to Cut Auto Insurance Costs When Your College Kid Comes Home

When Your Child Goes to College: What About Car Insurance?

If your child goes to college without a car, paying full insurance with them on the family auto policy feels a lot like throwing money away. But if you drop them from your policy, it creates dangerous gaps in coverage and can end in claim denials and more costs in the long run for your child.

Auto insurance is crucial if your child comes back for the holidays or drives your car to campus. But saving money should still be considered when possible. In this guide, we will go over parent strategies to safely save money on auto insurance while your child is away at college.

Auto Insurance Savings for Student Away at School

Insurance companies know that the parents of college students are worried about how to secure auto insurance coverage for their kids. They have come up with convenient, appealing discounts, such as allowing the parents to keep their kid listed on their policy but at a discounted rate during the school year. That way if the student visits home for winter break, summer vacation, or another holiday like Thanksgiving, they will still have auto insurance coverage.

This solution comes with requirements though. Read your policy details to see what they are. Generally, the requirements for discounts and lower rate strategies are:

• The student needs to attend school full-time
• The school needs to be at least 100 miles away from home
• The student has to leave the family vehicle at home and NOT bring the car to campus
• You cannot be misrepresenting the situation

Stacking Additional Discounts for Students

Good Student Discounts

Auto insurance policies companies may actually offer good student discounts for young drivers with great academic standing. If your college kid can maintain a 3.0 GPA (B average) or higher, they may be able to shave off around 20% of their portion of the auto insurance policy.

Check your auto insurance company’s discount options to see the exact requirements for their good student discount. Some companies require honor roll or ranking in the top 20% of class. Homeschooled children would also require other types of proof for good academic performance (e.g. standardized test scores).

Driver Training Programs and Telematics Apps

Telematics are also known as usage-based insurance. Drivers who are considered to be driving safely by the car sensors and insurer statistics can receive lower insurance premiums. If your company offers discounts related to usage, having your college kid be away from home for most of the year could help you lower your monthly premiums.

Many insurance companies offer safe driving programs for young adults to earn savings on their insurance policies.

For example, State Farm offers a Steer Clear program, and Progressive has a Snapshot program.

If your auto insurance policy isn’t offering any discounts or Student Away options, consider switching to a different auto insurance policy. Since most students go to college for 4 years, this would be a long time to be paying full premium price for the family insurance plan, especially when you know you can actually be saving money on coverage.

Affiliation and Alumni Discounts

Some of the auto insurance carriers offer school-specific or affiliation-specific discounts. If your child is in a fraternity, sorority, or attending university, check if your auto insurance company offers any special discounts.

Your insurance company may let you stack your policy discounts, but it does depend on the insurer. As always, reaching out to your insurance representative and viewing your policy details is the best way to check whether something is covered or discounted.

What NOT to Do: Common Parent Mistakes

It’s easy to make a mistake when you don’t know it is one, especially with how auto insurance can be tricky. Here are some of the 5 most common mistakes that parents make with auto insurance when their kid starts going to college.

Mistake 1: Completely Removing the Student from the Policy

College kids often come home for summer break, winter break, or other holidays. If they end up driving the car at all during these times, any insurance claim you file may be rejected if you removed the student from your auto insurance policy already.

In addition, removing your college student child from your insurance policy could create a lapse in coverage in the child’s personal insurance history. This may lead to higher insurance rates when they eventually get their own car later down the line.

Essentially, it is a fairly terrible idea to remove your child from your auto insurance policy (unless you are somehow 100% sure they are not coming back for the holidays). Better safe and covered than sorry.

Mistake 2: Relying on Permissive Use of Cars

Borrowing someone else’s car for the occasional use can be covered by the owner’s car insurance. This is great if your friend is visiting from out of state and wants to go for a drive. You don’t have to worry about who has enough insurance for the situation. If an accident happens, usually your coverage would be considered primary insurance and you would file a claim with your insurer even if it is your friend driving.

However, permissive use is only for the infrequent borrower. Auto insurance companies usually consider a child who returns home from college as a (temporary) resident of the household, and in-household members are excluded from permissive use coverage.

That means you need to have your child listed on your auto insurance policy if you want them to be covered while they drive the family car.

And it is highly, highly recommended to have auto insurance while driving, even if it’s only for a short ride. Accidents can happen and can be extremely costly, especially if the car is a total loss (needs complete replacement) or there are any medical expenses.

Mistake 3: Failing to Update the Vehicle’s Location

Vehicle location (like which state it is being driven in) is relevant to insurance premiums and coverage requirements. If your student takes your car to their campus, you need to make sure you properly update the garage ZIP code of the vehicle. Otherwise it could be classified as insurance rate fraud and result in denied claims in case of an accident. Insurance companies can tell where a claim happens and where a car is being driven regularly.

Mistake 4: Forgetting to Check Policy Requirements

The savings strategies and discounts for auto insurance coverage cannot be used in every situation. There are requirements for whether your student can be classified as a student who is away for school. Mainly they are:

• They need to be away for school and enrolled as a full-time student
• Their residence for the school has to be at least 100 miles away
• They can’t be regularly driving your car (cannot take the car to campus)

Check your policy requirements and exclusions to know what applies for your family. You can talk with your existing insurance policy’s agent to confirm whether your student would qualify for a college student discount.

In addition, you may be asked to notify your insurance company a good amount of time ahead of your child going to college (e.g. 30 days before or earlier). Any status changes should also be done promptly so that you are not left with a lapse in coverage or suspicion from the insurance company. Any issues can make filing claims later down the line more challenging.

Mistake 5: Faking It

Let’s say your child is coming home from college frequently or is taking the family car to campus regularly. It’s sweet from a family perspective, but it could be terrible when it comes to auto insurance. Many families think they can secure college student discounts for insurance if they fill out the forms. If the insurance company finds out you’ve lied, you could be penalized, your claim could be denied, and you could get your contract voided.

Strategy by Season: Summer vs. Winter Breaks

Managing the different types of holidays can be different when it comes to different holidays and break times. As long as your student is studying full-time and meets the other requirements for Student Away discounts, these following strategies are useful to consider.

Winter and Spring Break

Is your child planning to come back for short breaks, like winter or spring break? Then it may be a good idea to keep active your policy’s Student Away status. That way there is a discounted rate that should still allow for temporary, brief usage of the car by your student when they come back for the holidays. Winter and spring break are usually so short that they won’t break the daily driver rules.

Long Weekends

A student who’s coming home for a single long weekend probably can still be considered under Student Away status because they are not regularly driving the family car.

However, note that students generally need to be living far away, attending college over 100 miles from home for discounts and Student Away options. If they are going to the local university that is very close that they can easily visit every week or month, they may not qualify for typical college student auto insurance discounts.

If you are found to have misrepresented your student’s living situation and are trying to dodge the usual insurance rates when you don’t actually qualify for any premium discounts or incentives, you can be caught committing rate fraud. This means your claim could be denied and you could even get your entire insurance policy voided, along with other penalties.

If you commit any insurance fraud, you would also be blacklisted from most insurance companies, even if it is accidental. Be careful and do NOT misrepresent your student’s situation just to qualify for better discounts!

Summer Break

Summer break is usually the longest time that college students get to come home. This means it’s time to edit your auto insurance by telling your insurance company that your child has returned home for the next few months and may be driving more often. Update your child’s status from Student Away to active driver for June to August.

Remember to switch your college child’s policy status back to Student Away when the new semester starts. That way you can lock in any lower rates and discounts quickly while your child is at school.

Total Savings on Auto Insurance

If you set up your family auto insurance properly, you could end up only paying full active-driver rates for 3 months or so of the year instead of the entire 12. This can go a long way in saving on premiums for your auto insurance while your child is going to university or pursuing post-secondary education.

Not having to worry about paying full expenses on the auto insurance policy while your child is at college is a wonderful feeling.

Conclusion: A Year-Round Protection Plan

You can insure your college child without having to pay year-round, expensive rates. Strategies include:

• Keep them on the family auto policy but keep them on “Student Away” status
• Submitting school transcripts for GPA discounts before each semester
• Change their status to daily driver when they come back for summer break

Want to find the best policy for your family while your child is away at college? Check out the best auto insurance companies for affordable, reliable coverage.